I've said many times that what really matters in business planning is the planning, not just the plan. This time around I'd like to go into more detail about that moment of truth when you're working your plan, time has passed, but the plan is out of synch with reality. What do you do then?

Just asking this question means you're already on the right track. You can't get to this point without having done several things right:

You have a business plan. I'm hoping that your plan lives on your computer, not just on paper. It's all right to have a printout, but it's far more important that you still have it on the computer where you can manage it easily.

You've reviewed your plan. This is another good sign. It means your business plan had specifics in it. You had some numbers projected in your plan, probably forecasts of sales, expenses and costs. I hope you also included a milestones table, listing dates, deadlines and responsibilities for the tasks you included as part of the plan.

You can compare your plan to your progress. You're getting actual business numbers back from your accounting system and comparing them to those in your plan.

If the three points above don't apply to you, you're missing out on the benefits of planning for managing your business. An idea-only plan--without specifics--can be useful but not nearly as useful as a planning-to-manage-your-company plan.

If these points do apply to you, congratulations; but you still have the problem of what you do with the difference between plan and actual.

Step One: Review the Assumptions
I hope your plan includes a list of assumptions. This is a normal part of any modern business plan. Here's where you put the assumptions to use. Examine each assumption and figure out which ones, if any, have changed.

Step Two: Comparison of Plan vs. Actual
In the finance world we call it variance: the difference between plan and actual. Variance is positive when there are more sales or profits, or reduced costs or expenses. It's negative when sales and profits are lower, or expenses and costs have increased.

But variance isn't the end; it's the beginning of the analysis. It's not just numbers; it's the people and the activities involved. For example, expenses lower than planned are always a positive variance, but what if expenses were lower because the marketing programs weren't implemented? That would mean the variance is really the result of a failure to work the plan.

Regardless of whether the variance is positive or negative, the question is always: What management is required? If your plan included a good sense of who's in charge of what, then you know whom to talk to when things don't go according to plan. What went wrong? What should we do better from now on? What has to change? And remember: Changed assumptions are the best reason to change a plan.

Step Three: Revise the Plan Accordingly
It's about the planning process. Avoid falling into blame mode. Give credit easily. Revise wherever it will make the continuing management more likely to succeed. It's not a guessing game, it's like steering: You correct constantly to stay on course and keep heading for your destination.

A business is a web of interrelated factors. Sales and marketing programs affect cash flow, employee management affects morale, and morale affects productivity. I imagine a loose web of things that swing together. When sales go one way, we need to track the other things that need to move along with sales. Planning isn't about just guessing; it's about being able to follow the links in the web as things change.

Ultimately you develop strategic choice based on your judgment. Yes, your plan will be wrong because all plans are wrong. But having a plan will help you figure out what you misjudged. And then you can decide whether your best course is to give things more time or to let them go. And always look first to see what assumptions have changed.